It was indeed deemed the “D-day for dud funds” as the Australia Prudential Regulatory Authority’s (APRA) analysis of the worst-performing super funds was released. The findings, presented in a complicated spreadsheet, were less than clear with superannuation researchers saying the way the information was presented was “about as useful as an ashtray on a motorbike” to consumers wanting guidance on picking the best fund.
Thankfully there are good people in this world who have taken the time to translate the findings, and we’ve gathered some of the best sources we could find. According to SelectingSuper, the major takeaway was the performance of industry super funds. Industry super funds are funds that are made for specific industries i.e. Hostplus was made for hospitality workers, Mine Super was made for miners and so on so forth. APRA’s findings made it quite clear that industry super funds were outperforming retail super products, with retail super products being those that are typically offered by banks i.e. Colonial First State.
The second major takeaway was the performance of ‘MySuper’ funds. MySuper funds are designed to be simple, low-cost and easy to compare—but it turns out very few MySuper funds out there actually fit this definition. These funds are most commonly the default account for people who don’t choose their own super fund when they first start working. So the fact they aren’t performing too well, is actually quite concerning. Only 15 of the 96 MySuper products available, managed to perform what APRA considered ‘good’ (to sum it up simply). Of those 15 products that performed ‘good’, 12 are offered by industry super funds. The remaining 3 all happen to be corporate superannuation products offered by AMP with Brookfield Australia MySuper, Macquarie Group MySuper and Woolworths Group MySuper all performing ‘good’ across investment performance, fees and costs and the sustainability of member outcomes.
The third and final takeaway was the consolidation of super funds. If you’ve had more than one job, chances are you are probably with more than one super fund—which also means you could be paying fees on multiple accounts. Therefore, consolidating your super into one super fund can have many benefits including:
We know we’re stating the obvious here but super is super important because it’s YOUR retirement money. You worked hard for that money, and one day it’ll be yours to spend. So consolidate and choose your fund wisely.
Super simple summary:
Super hot tip 1: Do keep in mind that the past performance of super funds is not a reliable indicator of how they may perform in the future. Just like anything, really.
Super hot tip 2: If you do decide you want to switch super funds or need to consolidate your super funds everything can be done online. Not one nerve-inducing phone call required.
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